On Treating Like Cases Alike.

• Author: DE JASAY, ANTHONY

Idealism, intelligence, and importance are a rare combination. Politics by Principle, Not Interest, the book on "non-discriminatory democracy" by James Buchanan and Roger Congleton, achieves the feat of combining them, though the occasional strain shows that the three are not natural bedfellows. The book is enormously ambitious: it sets out to prove that by enshrining the principle of treating like cases alike ("the generality principle") in the constitution, the body politic could be purged of much sordidness and conflict. There would be no winning and losing coalitions, for coalitions could no longer take wealth from one another. Yet with "politics as taking" barred, the deadweight costs of redistribution and rent seeking would be saved, and all sides would be not only more fairly treated but also better off materially. Imposing the generality principle on politics would be a Pareto-improving move. Politics by Principle pleads for the move to be made.

The book is remarkable in at least two respects. The first is its courage in exposing the sacred cow of what it calls "majoritarian" democracy (is any "real-existing" democracy not majoritarian?) in all its immorality and inefficiency. Admirable, too, is the painstaking application of the analytical schema to such fields as externalities, public services, fiscal policy, interpersonal and intergenerational redistribution, and social insurance, implying that if the generality principle works, it does so right across all fields usually regarded as the proper domain of collective choices.

Three theses are put forward. The first, best called Contract, argues the possible legitimacy of coercion by collective choice and establishes a link to the contractarian tradition that now constitutes the mainstream of political thought. The second, Cycle, argues that because collective choices dealing with distributions of benefits and burdens are unstable and every distribution is dominated by another, winners cannot win permanently and would in fact be better off under a constitution that, by imposing generality, abolished the rotation in which winners become losers and vice versa. The third and main thesis is Generality, a formal rather than a substantive principle that, if applied, puts distributional conflict out of bounds by equal treatment, the treating alike of like cases.

Here is a massive job for the Devil's Advocate. The present essay traces the line of attack he could be expected to follow. The author of the essay wishes to add, for the record, that he would not be displeased if, on some judgment day, the plea of the Devil's Advocate were found to have failed and that of Buchanan and Congleton to have prevailed.

Contract

Pivotal to the argument is the lesson to be drawn from David Hume's parable about draining a swampy meadow by what is called "collective action" in modern jargon. In his Treatise of Human Nature, Hume tells us that some neighbors agree to dig a drainage ditch, to the benefit of their adjacent farms. "Agreement" here means more than the shared opinion that it would be nice to have a drainage ditch. It is a reciprocal promise by the neighbors to dig it. It is, in effect, a contract. Hume goes on to say that such promises are the means by which men achieve shared ends, from the digging of ditches and the building of bridges, harbors, ramparts, canals, and armies to the formation of governments. He is quite explicit in giving contract causal priority over the state, which most other theorists say is needed before a contract becomes a binding commitment. The contract here binds the parties because it is self-enforcing. In modern parlance, we would say that the parties see this interaction as a single link (a "node") in a chain of interactions stretching indefinitely into the future, with a probabilistic and ever-receding endpoint. The parties ("players") choose to perform according to their contract, as well as future ones to be entered into, because in comparing the relative merits ("payoffs") of performing as promised or defaulting, they consider the present value of two streams of expected payoffs along the whole chain. Performing prolongs the chain; defaulting (taking the "free rider" strategy) damages the chain or breaks it off altogether, so that the defaulter gets few or no chances to default again. Hume, in fact, implicitly employs the Folk Theorem of modern game theory, which shows the cooperative strategy in repeated prisoners' dilemmas under certain conditions to be a Nash equilibrium.

Buchanan and Congleton, taking the drainage ditch as an isolated collective enterprise, present the usual, and perfectly correct, solution that for each farmer, not digging is always a better strategy than digging, whatever the other farmers do; hence there will be no ditch, nor any other collective action. The farmers cannot credibly bind themselves by contract, and for their own good they need to be coerced by a contract enforcer, the state.

By this reasoning, contractarian philosophy explains the individual's willing subjection to a collective choice mechanism, backed by a monopolistic coercive agency, as a "social contract" that could be agreed to by all rational persons. The necessity for coercion breeds consent that, in turn, lends legitimacy to the state.

Buchanan and Congleton's restatement of the doctrine is more explicit and precise than most. It presents a clearer target for the Devil's Advocate than do more fudged and elusive versions. It has, or so he would argue, three easily identified chinks in its logical armor.

The first has long been recognized by critics of all forms of contractarianism, but to the best knowledge of the Devil's Advocate, no effective defense of it has ever been offered. If man can no more bind himself by contract than he can jump over his own shadow, how can he jump over his own shadow and bind himself in a social contract? He cannot be both incapable of collective action and capable of it when creating the coercive agency needed to enforce his commitment. One can, without resorting to a bootstrap theory, accept the idea of an exogenous coercive agent, a conqueror whose regime is better than anything the conquered people could organize for themselves. Consenting to such an accomplished fact, however, can hardly be represented as entering into a contract, complete with a contract's ethical implications of an act of free will.

Because prior to the construction of the collective choice mechanism the purported agreement must be unanimous (for, remember, there is as yet no rule for reaching non-unanimous decisions), no party to the social contract must be asked to accept a worse position, taking good periods with bad, than he would occupy without the contract. Here is the second chink in the doctrine's armor. Buchanan and Congleton stress that contractarianism "rules out payoffs that are sensed to be negative by any participant ... over the whole set of anticipated political choices, the base point being defined by positions achieved when the majority rule, collective action game is not played at all" (p. 18). However, life without any collective action is difficult to imagine except on desert islands. If it is conceivable at all, it entails unmitigated misery. Because the authors believe categorically that collective action presupposes a coercive authority, and because almost anything is a better payoff than that available at the "base point," it follows that almost any terms...